Immigrant entrepreneurs play a vital role in spurring innovation, job creation, attracting foreign investment and driving economies forward. This has led to an ever-larger number of countries offering start-up visas targeting high potential entrepreneurs. The 2023 edition of the OECD Indicators of Talent Attractiveness includes, for the first time, a ranking of the most attractive OECD countries for immigrant start-up founders.
Canada has been ranked the most attractive country for immigrant start-up founders and entrepreneurs compared to all other Organization for Economic Cooperation and Development (OECD) countries, according to the 2023 edition of the OECD Indicators of Talent Attractiveness, a ranking system that focuses on attracting foreign start up founders by considering general factors and specific immigration policies that target prospective international start-up founders.
Canada scored among the top 25 per cent across all dimensions in the framework, except for ‘skills environment’ with a significant number of unicorns, a favourable regulatory framework for starting and running a business, a welcoming society for migrants, and favourable living conditions, the OECD report stated.
The United States, France, the United Kingdom, and Ireland occupy second to fifth place in the ranking in the 22 OECD countries (Australia, Austria, Canada, Chile, Denmark, Estonia, Finland, France, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, the Netherlands, New Zealand, Poland, Portugal, Spain, the United Kingdom, and the United States).
The United States and United Kingdom are leading start-up nations, with very strong entrepreneurial cultures and many unicorn companies created in the past decade. However, the migration policy framework to attract start-up founders is not as developed as, for example, in Canada and France. The US offers an initial stay of 2.5 years for start-up founders, which may be renewed once for a further 2.5 years under the International Entrepreneur Parole Program. There is no direct pathway to permanent residence for migrants on parole, although they may apply for other visas if they are eligible.
France has in different ways invested in a policy framework to attract foreign start-up entrepreneurs and created two differentiated programmes for start-up founders. The French Tech Ticket initiative is exclusively targeted at non-French entrepreneurs, with a contest in which winners receive funding, incubation and mentoring for one year. The French Tech Visa is a fast-track procedure to receive a four- year residence permit for start-up founders under the Talent Passport visa category. Other countries allow considerably shorter times to develop ideas. The French Tech Visa is also open to staff of new firms, and not only to the founders. The migration policy framework, together with other factors such as favourable tax subsidies on R&D, brings France near the top of the ranking.
The top-10 ranking also includes several smaller European economies, notably Ireland, Portugal, and Sweden. Too small to compete with the top countries in the ranking in terms of the size of the start-up ecosystem, they nonetheless offer other advantages to international start-up founders. Ireland for example offers simplified procedures for family members to join and access the labour market. Ireland also has a favourable tax environment with generous tax subsidies for R&D, and low corporate tax. At the same time, Ireland is one of few countries that requires start-up businesses to provide investment capital, either from their own funding or securing this amount from an angel investor or venture capital fund. Portugal also offers generous tax subsidies for R&D, coupled with low living costs and a strong skills environment.
The bottom of the ranking includes a few countries that are normally associated with a strong start-up culture and strong start-up ecosystem infrastructure, such as Estonia, Japan, and Israel. Despite providing excellent access to venture capital funding and high digitalisation, these countries are low in the ranking mainly based on their migration policy frameworks, especially when it comes to prospects of moving on from an initial start-up visa to permanent residency. Japan only grants start-up founders a very short-term initial visa permit and imposes a strict review after just six months. Israel is the only country covered where start-up founders have no possibility of acquiring permanent residency. Furthermore, Japan and Israel allow family to join the main applicant, but only as a visitor without access to the labour market.
Though not in the top-10 ranking, Chile has invested significantly in its start-up visa programme, Start-Up Chile, by for example offering the chance for start-up funders to compete for funding to attract a high volume of start-ups and brand the country as an innovation hub. But migration policy alone will not be sufficient to make Chile as attractive to migrant start-ups as those at the top of the table. Broader innovation policies and programmes and improved regulatory frameworks are further needed to attract international high-potential entrepreneurs, the OECD report states.
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